Introduction to Company Law
Topic
1
X
Introduction to Company Law
LEARNING OUTCOMES
By the end of this topic, you should be able to: 1. 2. 3. 4. 5. List the types of business entities and its distinctions; Identify the various forms of companies and the changing of status; Discuss the doctrine of separate legal personality and lifting of the veil of incorporation; Describe the agency principles related to company law; and Evaluate the duties of a promoter and the pre-incorporation contracts.
X INTRODUCTION
The first topic of this module introduces you to Company Law. You will begin by looking at the scope and development of Modern Company Law. It is important to identify the main sources of company and the introduction to the Companies Act 1965. The decision in dealing with the most appropriate form of business association is most important. The area of discussion will be on types of business entities and distinctions between the forms of organisations. The registration of different types of companies and the changing of status is allowed by the Companies Act. The legal characteristic of a company allows it to undertake activities in its own right and to sue and be sued in its own name. The separate legal personality characteristic and their implications will be discussed. Although a company is regarded as a person, unfortunately unlike humans, it cannot operate itself as it acts only through agents, either by expressed or implied. The agency principles must be used whenever we wish to attribute responsibility for a contract. The motive behind the formation of a company is relevant. This is because of the way the law treats certain activities carried out in
2
X TOPIC 1 INTRODUCTION TO COMPANY LAW
the company. The motive of the person/persons behind the formation of a company is important.
1.1
DEFINITION OF A "COMPANY"
A company is: A "corporation" - an artificial person created by law. A human being is a "natural" person. A company is a "legal" person. A
1
X
Introduction to Company Law
LEARNING OUTCOMES
By the end of this topic, you should be able to: 1. 2. 3. 4. 5. List the types of business entities and its distinctions; Identify the various forms of companies and the changing of status; Discuss the doctrine of separate legal personality and lifting of the veil of incorporation; Describe the agency principles related to company law; and Evaluate the duties of a promoter and the pre-incorporation contracts.
X INTRODUCTION
The first topic of this module introduces you to Company Law. You will begin by looking at the scope and development of Modern Company Law. It is important to identify the main sources of company and the introduction to the Companies Act 1965. The decision in dealing with the most appropriate form of business association is most important. The area of discussion will be on types of business entities and distinctions between the forms of organisations. The registration of different types of companies and the changing of status is allowed by the Companies Act. The legal characteristic of a company allows it to undertake activities in its own right and to sue and be sued in its own name. The separate legal personality characteristic and their implications will be discussed. Although a company is regarded as a person, unfortunately unlike humans, it cannot operate itself as it acts only through agents, either by expressed or implied. The agency principles must be used whenever we wish to attribute responsibility for a contract. The motive behind the formation of a company is relevant. This is because of the way the law treats certain activities carried out in
2
X TOPIC 1 INTRODUCTION TO COMPANY LAW
the company. The motive of the person/persons behind the formation of a company is important.
1.1
DEFINITION OF A "COMPANY"
A company is: A "corporation" - an artificial person created by law. A human being is a "natural" person. A company is a "legal" person. A